In this episode of Executive Connect, host Melissa Aarskaug sits down with Marcia Dawood, seasoned angel investor, author, and educator, to unpack what really drives smart early-stage investing. Marcia shares how experienced investors evaluate founders, spot risky patterns early, think in portfolios instead of one-off bets, and avoid the emotional mistakes that catch many first-time investors. She also explains why SEC rules matter more than most people realize, how women can step more confidently into investing, and why building wealth should start with aligning money to values. This is a practical episode for executives, founders, and investors who want a clearer, smarter way to think about risk, opportunity, and long-term wealth.

Chapters:

00:00 Building wealth through aligned values
00:19 What most people misunderstand about angel investing
02:42 The emotional trap of backing founders too fast
03:31 How smart investors evaluate early-stage companies
05:11 Red flags that can signal trouble
05:59 Why portfolio thinking matters more than single bets
07:23 Why investor follow-up shapes better outcomes
11:24 Understanding SEC rules and investor protections
17:43 Why women still get left out of investing
27:33 Where to start if angel investing feels overwhelming
29:21 What angel investing teaches about leadership and focus
31:25 Capital discipline and the value of patience
35:26 Rethinking wealth beyond money

Marcia

(0:00) Building wealth is something that we’d all like to do. (0:03) But when we think about that term, building wealth, it has a lot of connotations and it might mean something different to everyone. (0:10) So what I really believe in is we need to align our money with our values and we want to build wealth in all the types of wealth that we could possibly have.

Melissa

(0:19) What separates smart investors from everybody else? (0:24) It’s not luck, it’s not access, and it’s definitely not the hype. (0:29) Marsha Dawood is a seasoned angel investor, author, and educator who has spent years helping people understand how early stage investing actually works.

(0:41) She has seen why most investors miss the best opportunities, how disciplined portfolios are actually working and built, and why understanding the SEC rules is not optional if you want to win in the long run. (0:56) Today, Marsha breaks down how smart investors evaluate risks, recognize patterns early, and make decisions. (1:04) Certainly is not impossible.

(1:07) Welcome, Marsha.

Marcia

(1:09) Thank you. (1:10) Thanks for having me.

Melissa

(1:11) Now, angel investing has often been portrayed as glamorous, exclusive, but the reality is it’s far more disciplined and far less forgiving. (1:24) From your experience, what do most people get wrong about angel investing before they ever make their first investment?

Marcia

(1:32) Yeah, well, in 2012, I was invited to an angel investing meeting, and I thought, cool, what is that? (1:40) I have no idea what angel investing even is. (1:43) So in a lot of cases, if you talk to people about it, there are a lot of different answers you get.

(1:48) I actually heard from somebody the other day who said, I actually thought it was somebody who comes down from the sky and brings money to people. (1:56) I mean, there’s all kinds of things, right? (1:58) But the most common misconceptions are that you have to be extremely wealthy, like fly a private plane, kind of like you see on television, that you have to have a finance degree, you have to be invited.

(2:09) And probably like 20, 25 years ago, that was pretty much true, but it has changed so much now. (2:16) And so there are a lot of ways that people can get involved with investing in early stage companies so that they can kind of dip their toe in the water, they can start to learn, and then they can grow their portfolio over the long term.

Melissa

(2:30) Yeah, no, I really agree with that. (2:32) We had a similar first angel investing meeting. (2:35) Now, I’m curious to get your perspective on what emotional traps catch first-time angel investors.

Marcia

(2:42) Okay, so probably the number one is you’re like, wow, I didn’t know that all this innovation was happening around me. (2:49) Then you start to meet the founders and you like fall in love with them. (2:53) And you’re like, oh my gosh, I love what they’re doing.

(2:55) I love them. (2:56) Oh my gosh, I have to invest in this company. (2:59) And it’s the first one you’ve ever seen.

(3:00) You don’t know anything, okay? (3:02) And you really should not do that. (3:05) I always caution new investors, wait a while, go look around, meet some other entrepreneurs, just watch for a while before you ever start to participate.

Melissa

(3:16) And I love that you said that, because I’m guilty as one of those people who fell in love with the founders and like, absolutely, I’m investing. (3:23) But then when we unpacked things, we learned quickly that that wasn’t the best mistake ourselves. (3:29) So I love that you mentioned that.

(3:31) Now, when you look at early stage companies, what signals matter most to you when you’re evaluating them? (3:36) How do experienced investors actually look at the data and understand what to make of it?

Marcia

(3:48) So I would say that the number one thing that I’m looking for is what is the problem that this entrepreneur is, or company is trying to solve? (3:57) So in a lot of cases, you’ll see a company working on something and it looks pretty cool. (4:01) But is it a solution in search of a problem?

(4:04) Or are they really solving a very, very sticky problem? (4:09) Because as soon as the problem is really, really, really sticky and really bad, people will want change. (4:16) They will want your solution.

(4:18) But if you’re just making like another nice mousetrap, that’s probably not going to be as commercializable to be able to actually go out and sell it. (4:29) The people will become your customers and things like that. (4:31) So I’m always looking.

(4:33) The very first thing I want to see, especially even in a pitch deck, is to have the entrepreneur really explain what the problem is and how it is being solved currently and why that is absolutely the wrong way to do it.

Melissa

(4:49) Yeah, absolutely. (4:51) I think I’ve read several of these and I was confused even what they were presenting or what they were offering. (4:56) And exactly to your point, what problem were they solving?

(5:00) And so sometimes I find that the marketing documents can be so pretty and it can be so organized, but I read a couple of pages and I’m still confused. (5:11) What red flags cause you to pause when you’re looking at different deals?

Marcia

(5:18) So I would say looking at the team is super important. (5:22) And if I see a team that has the same type of person (5:26) on the team and there isn’t kind of a well-rounded balance (5:30) between an operator, a visionary, (5:33) somebody who’s going to be able to do sales, (5:35) somebody who’s going to be able to do the technical side, (5:38) if there isn’t a balance there (5:40) and maybe the founder just hired a whole bunch of people (5:43) that they liked, that’s probably a red flag to say, (5:47) hey, wait a minute, you probably need (5:49) to be surrounding yourself with more people (5:51) who are going to help you build this company.

(5:55) And one type of personality really can’t do that.

Melissa

(5:59) Yeah, and so I wanna talk a little bit about pattern recognition and portfolio thinking. (6:04) You often talk about that pattern recognition and discipline are key. (6:09) So how do smart investors think in portfolios rather than individual bets?

(6:15) And why is this mindset so critical for long-term success? (6:20) Ready to lead smarter and invest wiser? (6:23) On the Executive Connect podcast, we unpack executive strategies for wealth and influence.

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Marcia

(6:34) Yeah, so in a lot of cases, you really don’t ever as an individual angel want to be playing solo. (6:42) You wanna be either investing with a group, investing through a fund, and you wanna think about your portfolio in a way that is extremely diversified. (6:51) And when I say diversified, I don’t mean just you have a bunch of different companies.

(6:55) You wanna be thinking about diversification across the types of stages of the companies, the industries that the companies are in. (7:03) I’m a big person who really likes to invest in things that are gonna make big change. (7:08) So I wanna make sure that I’m aligning my investments with my values and what I really care about, seeing change happen.

(7:16) And so I wanna make sure that I’m doing that in a way that my portfolio actually aligns with that.

Melissa

(7:23) Now, how often do your follow-up strategies influence your returns?

Marcia

(7:29) So I would say that in a lot of cases, angels bring a lot more to the table than money. (7:35) So early stage investors, whether it’s an angel investor or a VC, they are really trying to help the company grow and scale. (7:45) And so they bring a lot more to the table than simply money.

(7:48) They’re bringing expertise, their network, and they’re really helping the company to grow. (7:53) So writing a check and saying that there’s no follow-up, there’s no way that you’re gonna talk to the company again is really not a great strategy. (8:02) You wanna be in communication with them and on the flip side of that, another red flag is when the founder takes money and then you never hear from them again until they need more money.

(8:13) So that’s something that actually is a huge pet peeve of mine. (8:16) Like if you are a founder and you’re growing a company and you’ve taken on investors, you need to keep them in the loop of everything that you’re doing, good and bad. (8:25) And you know what, as early stage angel investors or early stage VC, we know that there’s gonna be hiccups.

(8:32) We know there’s gonna be ups and downs. (8:33) We don’t wanna hear all the good things all the time. (8:36) Of course, we like hearing good things, but we need to hear what’s really going on in order to really be able to help the company.

(8:42) And so that’s where I see a lot of founders start to have missteps.

Melissa

(8:46) Yeah, and the beautiful thing about letting your investors know the good and the bad, you’re building trust. (8:52) You’re building trust with them. (8:54) And so when they call you for more money, you have a different type of relationship with your investors versus like you said, we don’t hear anything, we don’t hear anything and then they need something.

(9:08) And we all know how it feels to not hear from anybody and then get a call and somebody needs something. (9:14) Talk to me a little bit about how does diversification protect your decision quality?

Marcia

(9:22) Well, I think that people really need to think about a strategy before they start writing checks and really have a, like, I call it a bucket for lack of a better term, but like a bucket of money that they’re gonna use in order to invest in this asset class. (9:37) So this asset class is riskier than most. (9:40) The returns can be great, but it also, you can lose all your money.

(9:43) So we have to be like totally upfront about that and think about it in a different way. (9:48) Think about it in the sense that, okay, of all the investable assets I have, maybe I’m gonna put some of them into a mutual fund or the stock market or whatever I’m gonna do. (9:56) And then I’m gonna take this bucket of money.

(9:58) At the Angel Capital Association, we usually say don’t use more than maybe 5% of your investable assets to invest in a risky asset class like angel investing. (10:06) So once you’ve determined that, then you wanna have a strategy for how to diversify a portfolio and be able to use that bucket of money. (10:14) Knowing that there is probably gonna be some times where you’re not gonna have a lot of liquidity.

(10:20) It could take years for an exit to happen or something to happen that you would actually get some of that money back. (10:26) So you need to be thinking about it like that too. (10:29) So I always tell people, be very careful about the money that you’re using to invest in early stage companies.

(10:34) It’s a long play. (10:36) Don’t use your kid’s college fund when they’re like 17 years old, like bad strategy, right? (10:41) So you wanna make sure you have a really good strategy.

(10:44) So then no matter how much money you have, you can start to divide that up and say, okay, I know I need to invest in at least, sometimes people will say 10 companies. (10:52) I like it to be a little bit higher than that. (10:54) So maybe like 20, 30 companies.

(10:56) And how do you do that? (10:57) In a lot of cases, you can do that through a fund and immediately you get instant diversification. (11:01) And I talk all about this in my first book, do good while doing well.

(11:05) So really helping people to understand like there are ways to get more diversification without the laborious and onerous way to have to just go through picking every company and having to do due diligence on every company. (11:18) You don’t have to do that. (11:20) There are other people who can do that and you can just participate in more of a passive way.

Melissa

(11:24) Yeah, and I think I’m one of those people, Marsha. (11:28) I like to go to the events, hear the pitches, meet everyone, read the paperwork, and let somebody else, which is really my husband, do all the back and forth with the due diligence. (11:39) So I classify as one of those people.

(11:42) So as someone who works in regulation, I’m a big fan of knowing what the rules are when I’m playing the game. (11:50) So the SEC is one of the big rule makers. (11:55) And so let’s talk about what are those rules and what people should not ignore.

(12:02) So it’s rarely discussed, I feel like, early in these initial conversations, at least in my experience. (12:09) So why does the SEC rules exist and how do they shape how investors can and make investments, how they’re structured, and how to manage the risk?

Marcia

(12:22) Yeah, so I serve on the Small Business Capital Formation Advisory Committee to the SEC and actually chair that committee. (12:30) And so just as a full disclaimer, my views are my own, not part of the SEC. (12:34) But the rules around an accredited investor are extremely interesting and very, they’re set up as a way to protect investors.

(12:43) So in a lot of cases, you’re thinking about rules so that there can be capital formation so that companies can raise money. (12:50) But we also wanna have those investor protections available for people. (12:54) So basically, in a lot of ways, think about it like you don’t want somebody who is on a fixed income, who really doesn’t make a lot of money to be going out and kind of, in a sense, investing in a risky asset class and potentially losing all their money.

(13:07) So the SEC has a rule or a definition called the accredited investor. (13:12) Accredited investor just simply means that you have a certain amount of wealth or income. (13:16) It’s a little deceiving because the word accredited kind of makes it sound like you had to take a test or you had to pass a course or something like that.

(13:24) And there really isn’t anything like that exactly that you can, there’s like a little caveat that if you pass this like series 63, I could go on and on and on, but it doesn’t matter. (13:32) The big thing is, do you have a certain amount of wealth or income? (13:35) And that income is $200,000, 300,000 if you’re including a spouse, or you have a million dollars in net worth minus your home.

(13:43) So that definition is there to make sure that the people who are investing in these early stage companies really kind of understand the rules, understand the risk and have the income or net worth in order to be able to lose the money if potentially that happens. (14:00) So there’s that piece of it. (14:01) The other part is the way that companies actually file what we call an offering, or when they’re saying, hey, I need to raise money, how are they gonna do that?

(14:09) And in a lot of cases, again, the SEC is trying to make sure that they’re protecting the founders and the investors by making sure that the same type of disclosures are used for each company that’s raising money. (14:22) So if you ever looked at investment documents that the lawyers put together, you’ll see a lot of disclosures on there about the risk, about what could happen, that you could lose all your money, and a lot of things that related to kind of making sure that everybody is aware of the situation and the things that they’re investing in before they actually make the investment.

Melissa

(14:46) Yeah, I’m thinking as you just mentioned, so talk to me a little bit about where investors unintentionally expose themselves to these compliance risks.

Marcia

(14:59) I think in some cases when investors don’t, well, there’s two sides to that. (15:04) So let me to the investor, then the founder. (15:05) So the investors, if they are not hitting (15:09) that accredited investor definition (15:10) that I just mentioned, (15:12) and they wanted to invest in a company (15:14) and they don’t necessarily know that they can’t, (15:17) that can get sticky down the road, (15:19) especially for the founder, (15:20) if they do end up taking the money (15:21) or I’ve also seen sometimes investors, (15:24) they might say, oh yeah, yeah, (15:26) I hit that definition, but they really don’t. (15:29) And if the founder had to prove it by getting a tax return or some kind of statement from their accountant, that down the road could get very, very sticky. (15:39) The other piece is when founder, hey, they’re like, hey, I’m raising money.

(15:43) I’m gonna go out and I’m gonna tell everybody and I’m gonna put it on social media and I’m gonna shout it from the rooftops. (15:49) And in most cases, the rules will not allow you to do that. (15:53) It is supposed to be a network type of conversation where people would actually talk to the people that they know in their network and maybe be introduced to one or two people one degree of separation from their network, but they wouldn’t necessarily go out and shout it from the rooftops.

(16:12) Again, it’s because of the investor protection. (16:15) So the founder really has to be careful about how they are, what we call soliciting, meaning that how are they actually going and talking to investors and how are they trying to find those investors? (16:27) And if it looks like they’ve done some things that would be considered general solicitation, meaning they’re going out and talking to everybody and putting it out on social channels, then that’s very frowned upon and could get the founder in trouble.

Melissa

(16:40) Yeah, that’s great information. (16:42) As someone who has been an executive for many, many years, I find some of the smartest people I know, doctors, VPs of companies, C-suite people of companies, they miss a lot of these great opportunities to diversify their portfolio and really invest in these great deals. (17:02) So why does this happen?

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Marcia

(17:43) Yeah, that’s a great question and actually why I wrote my second book Unapologetic Wealth, which comes out March of 2026. (17:52) And the reason is there’s a mindset around this. (17:56) I’ve been an angel investor for over 14 years and I’ve talked to people who get really excited about hearing about the companies.

(18:03) They’re like, oh, that’s so cool and I really like that and I really like what they’re working on and the type of change that they’re trying to make. (18:09) And I would say, well, how come you aren’t doing it? (18:12) And they would say, me?

(18:13) Well, I thought you had to be rich. (18:15) I thought you had to have a finance, all the things we said at the beginning of the show, right? (18:19) And I would say, no, you can be an investor.

(18:22) And then I wrote the first book, Do Good While Doing Well to kind of demystify all that for people and say, hey, there’s a way that you can invest for as little as $100 through equity crowdfunding. (18:32) You can get started. (18:33) You can use your time instead in order to try to learn and get to know people.

(18:37) And then in still in a lot of cases, especially with women, I would hear, well, I just don’t even know like where my money is. (18:46) I don’t do the investing. (18:47) My husband does the investing.

(18:48) I let my financial planner deal with that. (18:50) I just don’t, like I have so many other things to do. (18:52) I can’t, I don’t have time and I can’t be bothered so it’s kind of overwhelming.

(18:57) And then as I was thinking about it, I thought, you know what, we’re really doing a disservice. (19:00) First of all, to female founders because we need more female funders in order to get money to female founders, right? (19:07) One, and then also like women, we are really smart with money.

(19:12) We are, I know sometimes people think, oh, I’m not good with money. (19:14) So I’m just gonna let somebody else deal with it. (19:16) No, women are really good with money.

(19:18) We are very diligent. (19:19) We look at all the way that we spend money for shopping. (19:22) We’re great with budgeting, all of these things.

(19:24) But we really haven’t been given the opportunity or even invited in to invest. (19:30) So I think in a lot of cases, we need to change our mindset. (19:34) We need to have the mindset of, hey, I can be an investor too and I deserve to be here and I deserve to have a seat at this table.

(19:41) And so that’s really why I wrote my second book, Unapologetic Wealth, because I want people to really understand that this money mindset matters in all of the things you’re doing. (19:51) And I’m not just talking about investing. (19:52) We really want people to align their money with their values.

(19:56) And when you start to do that, all of a sudden your wealth becomes something that’s very different. (20:02) You have time wealth, health wealth, relationship wealth. (20:06) So it isn’t just about money.

(20:08) It’s about really, what do you want out of life? (20:11) And in a lot of cases, these early stage companies are doing things where they can make significant change. (20:17) And if you can be a part of that, then a lot of people would love to do that.

Melissa

(20:22) Yeah, so true. (20:23) And I was just at a oil and gas conference and they were talking about women investors in oil and gas. (20:33) And it was, I don’t remember the statistic, but it was under 5%, maybe 2% or 3% of women invest in private oil and gas deals.

(20:40) And I’m like, that’s bizarre to me. (20:43) And they weren’t counting the women that were, that the husbands were bringing the deals forward. (20:49) But it was just private deals within women’s names.

(20:53) And so these numbers are so low. (20:55) And so do you have any insight on what it is for angel, like what percent of women are investing in angel investing in their names?

Marcia

(21:04) Yes, yeah. (21:05) So there’s a statistic that we hear all the time in venture capital is that less than 2% of venture capital dollars go to women, which is just horrible. (21:16) However, we have seen it on the angel level on the smaller side, smaller checks, that it has started to change.

(21:25) We have seen more, we have data through the Angel Capital Association, you can find that on their website, related to the fact that there are more angel investors who are women than there ever have been. (21:38) So that’s good. (21:39) That’s a signal to me that the market is starting to change.

(21:42) But every time a pitch book or some type of data group comes out with more information, every year, these bigger checks, we really haven’t moved to that 2% needle. (21:54) And so I was fortunate enough to become an associate producer on a documentary called Show Her The Money, where we are talking about the fact that less than 2% of the funding goes to women. (22:06) And that actually was a grassroots effort for a very long time.

(22:09) But in March of 2026, it will start streaming on Apple and Amazon. (22:14) So people can see it and kind of get like more of an idea of what’s really happening. (22:19) But those bigger checks, it’s really important.

(22:22) What ends up happening, it’s great, it’s starting to change at the smaller scale for angels. (22:28) But what happens with those female founders who end up growing to a certain size, and then they can’t get the series A or the series B money because they can’t get the capital from venture capital. (22:40) So then either the company goes out of business or they have to sell for pennies on the dollar.

(22:45) It can be very bad.

Melissa

(22:48) Yeah, it’s also interesting if you correlate it to how many women are educated in getting degrees. (22:55) We outpace a lot of, and this isn’t about a men podcast versus a women, but it’s interesting that we’re supposedly getting more degrees, getting more advanced degrees. (23:08) Yet when I look at investing in a broad stroke, we’re investing like substantially less.

(23:17) And to your point, my husband does that, or I don’t do that. (23:22) And I have several women in my network that have seven figures in cash in their bank account and their checking account or their savings account, which is exactly, exactly, right? (23:34) So they could be taking to your point a small portion of that money and investing in these deals.

(23:43) So talk to me a little bit about how fear of missing out creates poor decision-making and just maybe fear in general.

Marcia

(23:55) Yeah, so if you think about it, this is kind of one of the ways that I thought I need to write another book about this is, so my husband and I were having this conversation about a potential investment. (24:06) And I was looking at it as a way that we might lose money. (24:12) And he was looking at it as a way to, as an opportunity, right?

(24:16) So it’s almost like if you said to somebody, I’m gonna give you a hundred dollars. (24:22) And if they lost that hundred dollars, that would actually be worse for them than if somebody came along and said, here, I’m gonna give you a hundred dollars and you can keep it. (24:31) But that fear of losing the hundred dollars is actually a bigger problem than in their minds.

(24:37) This is like our internal money stories talking to us. (24:43) And if we can start to change that mindset and start looking more at opportunities, then I think we’re really onto something. (24:50) And what you just said about women keeping money in cash, I heard that over and over and over again, as I was writing this book, that there is a lot of money being left in checking accounts, earning no money.

(25:03) So think about that. (25:04) You’ve got all this money. (25:06) I get it.

(25:06) A lot of people think, oh, well, I just wanna feel safe. (25:09) I don’t wanna risk it. (25:11) I wanna make sure that it’s there.

(25:13) But the opportunity cost that is being lost by having that money sit in cash, and I’m not saying go take it and put it into risky asset classes. (25:22) I’m saying go take it and at least put it into a money market account, a mutual fund, or put it in a stock. (25:28) Do something in order to find a financial planner who can really help you based on your risk portfolio of what you wanna do with that money.

(25:37) But keeping it in cash, women will actually start to outlive their money because they haven’t taken the opportunities in order to invest and have their money grow.

Melissa

(25:47) Yeah, it’s an interesting discussion. (25:50) And I’ve had this over and over with several of our alternative investment male friends and the numbers are really low. (26:00) And I’m like, well, I find my circle of influence specifically to women.

(26:09) We’re educated executives. (26:12) And oftentimes when we’re in these rooms, it’s not that we’re intimidated. (26:19) It’s that maybe we don’t wanna ask the question for fear of either judgment, not knowing, we’re high functioning people.

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Marcia

(27:33) I think in a lot of cases, it’s about getting to know what’s happening even right in your own community. (27:39) So I always tell people before you go out and look at something and say, oh my gosh, it’s just so overwhelming. (27:47) I can’t do it or whatever.

(27:48) Just find out what’s happening in your own community. (27:51) And that would be simply to do an online search that says startup events in and then just put in your city or town. (27:58) There’s stuff happening in every city, every town.

(28:01) So you could just go and start to meet entrepreneurs, see what’s happening in your own market. (28:07) Because I always find that if you can meet people that live where you live, they’re working on problems in the areas that you live in. (28:15) That really matters.

(28:15) That’s like part of your community. (28:17) And then you start to see the things that are happening and then you can expand out. (28:21) But you don’t have to feel like you have to learn everything right away.

(28:25) You certainly don’t have to feel like you can’t ask a question because in a lot of cases, there’s a lot of people who are new and there’s a lot of questions to be asked. (28:33) But the other thing I would tell people is we mentioned equity crowdfunding before. (28:37) There are several platforms out there.

(28:40) The big three that have the majority of market share right now are WeFunder, Republic and StartEngine. (28:45) You could go to any of those and just simply look around. (28:49) You could read about the different companies.

(28:51) You could see what was interesting to you. (28:53) It’s also a fun dinner time conversation with your kids to just think about like, hey, what’s happening in the world? (29:00) What are the innovations that are being worked on?

(29:02) What are the things that we care about? (29:03) And then you can start to see if it’s something that you want to get into. (29:07) But I think in too many cases, people think, oh, I’m kind of overwhelmed by all of this.

(29:13) I don’t want to ask any questions. (29:14) I don’t want to feel stupid. (29:15) But at the end of the day, there’s a lot of ways that you can just find out what’s going on around you.

Melissa

(29:21) Yeah, well said. (29:23) Now for those executives that are not investing in angel investing, but what can they learn from the way the angel investing works? (29:35) So maybe they don’t write a check.

(29:37) Maybe, you know, they’re not involved. (29:39) Talk to me a little bit about what lessons from angel investing translate directly into better decision-making strategy and leadership.

Marcia

(29:49) Yeah, I mean, if you look at companies who take on angel investment or VC investment, they are scalable. (29:58) That’s probably, if I had to say it in one word, they’re the companies that can grow and scale. (30:02) And that’s what investors are looking for.

(30:04) So I think there can be a lot of lessons learned from focus. (30:09) So in some cases, I see companies that are, they have a great product. (30:13) They do have a good, a very sticky problem.

(30:16) They found a great solution. (30:18) And now that solution actually could be applied to let’s say three or four different industries. (30:24) Well, that can be kind of the kiss of death because what ends up happening is the company ends up saying, oh, well, we can use this solution over here and we can get customers there.

(30:33) And then we can use solution over here and we get customers there, but there’s no focus. (30:37) So that focus is so important, especially when you’re at the earliest of stages because you really don’t have the resources. (30:43) You rarely have enough money.

(30:45) You don’t have enough staff. (30:47) And you’re trying to do all these things. (30:48) So I think that translates really well into other companies of any size because in a lot of cases, if we’re making, if we’re trying to like basically boil the ocean, it’s just not gonna happen, right?

(31:02) So we need to focus on what it is that we’re really, really good at and make sure that our customers, whoever they are, are getting that part of our company and the things that will help solve those problems. (31:15) And then we can move on to the other things.

Melissa

(31:18) Yeah, I agree. (31:20) It’s so true. (31:21) And so let’s talk a little bit about capital discipline.

(31:25) What does capital discipline teach corporate companies about budgeting, corporate America companies about budgeting?

Marcia

(31:34) Well, I mean, capital discipline, the one thing you don’t wanna hear as an investor is a founder closes their round and they just went to eat dinner at a steakhouse with their whole team and they just flew to Paris for the weekend. (31:47) So that would be extreme example of not having capital discipline, right? (31:52) So you need to, I think companies need to have obviously a budget, a focus and think about how to strategically use that capital.

(32:03) So what I’ve found is that women founders in particular are very, very good with stretching a dollar. (32:10) They can make those investment dollars go so much farther. (32:14) And so I think that’s a good lesson to take into consideration when you’re thinking about how do I wanna use this money?

(32:22) So look at a company that maybe gets a million dollars in investment for a lot of bigger companies, that would be a drop in the bucket. (32:29) But for an early stage company, that’s a lot of money. (32:32) But if you don’t use the money properly, it is going to run out very quickly.

(32:38) And I’ve seen founders who can really stretch that money and make sure that they are getting to the milestones that they need to hit in order to be able to raise money again. (32:49) And if they can’t, then that is where the deficiencies really lie.

Melissa

(32:55) I feel like we all, discipline is like, in all facets of our life is something that we all need to practice more of. (33:03) And a world where we get everything tomorrow instead of, it takes work, it takes time, nothing happens immediately. (33:13) And so one of the things I like to talk about is patience, having patience.

(33:18) The first time you make an investment in something, ready to get those returns right away. (33:25) So let’s talk a little bit about why patience is a strategic advantage.

Marcia

(33:30) Yeah, well, they call angel investments, patient capital, basically because you have to be patient in order to make these investments work out. (33:43) And in some cases they won’t. (33:45) There are probably at least 50, if not 70% of early stage companies that don’t make it.

(33:52) But what you’re really holding out for are the companies that do. (33:55) And in some cases that could be a huge win, big company that either they have a big M&A, they get acquired by a bigger company, or maybe they even do IPO. (34:07) But I think it’s really important that we have the patience and keep talking to the founders because that is where I think the patient starts to wane when we’re not given the information, when we don’t really know what’s happening with the company.

(34:22) I have a lot of patience when it comes to companies that are telling me what’s going on and they’re actually working and trying to get to that next level. (34:31) But if I don’t hear from them for a long time, then I don’t even know if they’re in business still. (34:38) They haven’t talked to me for whatever, 18, 24 months.

(34:42) So I think the patience can be there. (34:46) It also has to be managed.

Melissa

(34:49) Yeah, well said. (34:50) I love that. (34:51) It’s funny, I talk a lot about patience.

(34:53) I would say that was probably one of my worst skills in my younger years and the older I get and having children and making investments. (35:03) Patience has become one of my best qualities. (35:06) So it’s funny how the worm turns.

(35:09) I want to get any final thoughts. (35:11) First of all, thank you for being here. (35:13) I want to get kind of any final thoughts that we didn’t touch on or maybe even one idea you want listeners to carry forward through their journey in angel investing.

(35:25) What would that be?

Marcia

(35:26) Yeah, I think building wealth is something that we’d all like to do. (35:31) But when we think about that term building wealth, it has a lot of connotations and it might mean something different to everyone. (35:39) So what I really believe in is we need to align our money with our values and we want to build wealth in all the types of wealth that we could possibly have.

(35:49) Our time, our relationships, our health and really think about that and then see how we can align our money with our values and how we can help to make the change that we want to see in the world. (36:02) And that can all be through early stage investing.

Melissa

(36:06) Yeah, that’s fantastic. (36:08) Thank you so much for being here. (36:10) For those who want to go deeper and check out your work, what is the best way for them to connect with you and learn more about your book and your resources?

Marcia

(36:20) Yeah, so on my website, which is simply marciadawood.com, M-A-R-C-I-A-D-A-W-O-O-D.com. (36:28) I have a lot of resources. (36:30) I do also have a podcast called The Angel Next Door.

(36:33) All the episodes are categorized on there by the type of episode that they are. (36:37) So if somebody’s interested in learning more about equity crowdfunding, which we talked about a lot today, there are episodes specifically tagged for that. (36:45) I also have the first chapter of each of my books, including the one that’s not out yet, on for free download on the website.

(36:54) And so there’s lots of resources. (36:56) I put all kinds of stuff for free on my website because I just want people to know about it. (37:01) I really don’t have a whole money-making game in it.

Melissa

(37:04) Thank you so much for being here and sharing your knowledge and your kindness with our listeners. (37:10) That’s the Executive Connect podcast.